In 2016, Ryce contributes non-depreciable property with an adjusted basis of $60,000 and a fair market value of $95,000 to the Montgomery Partnership in exchange for a one-half interest in profits and capital. In 2017, when the property's fair market value is $100,000, the partnership distributes the property to Jarvis, the other one-half partner.
Which partner must recognize a gain and what is the amount recognized? What is the effect on that partner's basis in the partnership interest?